No products in the cart.
Why is FOREX trading so popular? Well, Most people still don’t know anything about forex. If you are one of those who still don’t know anything about Forex, I already wrote a post explaining what is Forex market. To understand what is Forex, Click here–> What Is FOREX?
FOREX trading is so popular because of the following reasons:
You can open an account to trade Forex with as little as US$ 200 at he most brokerage firms.
I personally don’t recommend any Trading platform for now because Fenix Capital Management, LLC, which offers a state of art Trading platform, that allows you to place orders directly by clicking on the chart.
It is important to know the differences between cash FOREX (SPOT FX) and currency futures.
In currency futures, the contract size is predetermined.
With FOREX (SPOT FX), you may trade electronically any desired amount, up to $10 Million USD.
The futures market closes at the end of the business day (similar to the stock market).If important data is released overseas while the U.S. futures markets is closed, the next day’s opening might sustain large gaps with potential for large losses if the direction of the move is against your position.
The Spot FOREX market runs continuously on a 24-hour basis from 7:00 am New Zealand time Monday morning to 5:00 pm New York Time Friday evening.
Dealers in every major FX trading center (Sydney, Tokyo, Hong Kong/Singapore, London, Geneva and New York/Toronto) ensure a smooth transaction as liquidity migrates from one time zone to the next.
Furthermore, currency futures trade in non-USD denominated currency amounts only, whereas in spot FOREX, an investor can trade in almost any currency denomination, or in the more conventionally quoted USD amounts.
The currency futures pit, even during Regular IMM (International Money Market) hours suffers from sporadic lulls in liquidity and constant price gaps.
The spot FOREX market offers constant liquidity and market depth much more consistently than Futures.
With IMM futures one is limited in the currency pairs he can trade. Most currency futures are traded only versus the USD.
With spot FOREX, you may trade foreign currencies vs. USD or vs. each other on a ‘cross’ basis, for example: EUR/JPY, GBP/JPY, CHF/JPY, EUR/GBP and AUD/NZD
More and more well informed investor and entrepreneurs are diversifying their traditional investments like stocks, bonds & commodities with foreign currency because of the following reasons: (will be continued)
Risks of currency trading: Currency trading is an extremely risky form of investment and is only suitable for individuals and institutions capable of handling the potential losses it entails.
An account with an broker allows you to trade foreign currencies on a highly leveraged basis (up to about 400 times your account equity). The funds in an account that is trading at maximum leverage may be completely lost if the position(s) held in the account experiences even a one percent swing in value, given the possibility of losing one’s entire investment.
Speculation in the foreign exchange market should only be conducted with risk capital funds that, if lost, will not significantly affect the investors financial well-being.